editor’s note

The Danish utility DONG Energy has announced it will suspend purchasing Colombian ‘blood coal’ from Glencore in the latest setback for Colombian coal exporters. The receding coal export tide also claimed another victim this week with the rejection of Arch Coal’s permit application for the Tongue River Railroad in the US. Significant shifts in electricity demand may also make more proposed plants obsolete: this week it was revealed that the World Bank’s support for a plant in Kosovo hinges on inaccurate estimates of power demand. A news report also tantalisingly flags the Indian Government’s estimate of coal power demand in 2022 may be substantially cut due to slowing demand and the growth of renewables.

Bob BurtonCoalWire Editor

features

World Bank’s support for Kosovo plant relies on outdated data

The World Bank’s support for a proposed new coal plant in Kosovo is based on a 2011 projection of power demand growth which hasn’t eventuated and renders the project unnecessary, writes Tom Sanzillo from the Institute for Energy Economics & Financial Analysis.

China’s plant overcapacity to bite soon, warns Greenpeace

A Greenpeace study warns the completion of new coal-fired plants in China is adding to overcapacity and increasing the prospect many – including those belonging to state-owned companies – will soon be losing money, writes Li Jing in the South China Morning Post.

campaigns

US coal railway defeated

After a long-running campaign by landowners, the Northern Cheyenne tribe and environmentalists the US Surface and Transportation Board (STB) has rejected a permit application for the 68-kilometre long Tongue River Railroad. The proposed US$405 million railroad was essential for Arch Coal’s proposed Otter Creek mine in Montana. However, late last year Arch Coal sought to suspend the railway permit application, a move opposed by the Northern Plains Resource Council which argued it should be rejected outright. With Arch Coal and its Otter Creek Coal subsidiary having filed for bankruptcy and the mine permit application suspended indefinitely, the STB decided the railway permit application should be dismissed. (Billings Gazette,KTVQ.com)

Philippines council rejects coal plant

The Cebu City Council has voted against the 300-megawatt (MW) Sawang Calero plant proposed by Ludo Power Corporation. Strong community opposition had centred on the health impacts of the project, prompting two councillors who supported it to withdraw their support. While a serious setback, the plant proponents can refile an application after the May 9 election. Last week the Climate Change Commission, the lead national policy agency on climate, urged the Philippines government to “step away from coal.” (Sun Star Cebu)

“Coal was a dirty word and now I would want people to believe that coal is no longer dirty,”

top news

Danish utility suspends Colombian ‘blood coal’ imports: The Danish utility Dong Energy has informed PAX, Urgewald and Colombia Solidarity it “will not enter into any new purchase contracts” with Glencore’s Colombian subsidiary “until we are comfortable that Prodeco is meeting our standards of responsible sourcing.” The groups have been pressing European utilities to stop buying ‘blood coal’ from Colombian companies until the concerns of the victims of human rights violations have been addressed. (PAX)

Protests set to resume against Bangladesh plant: Protests are set to resume against the proposed Banshkhali plant in Bangladesh after officials failed to honour promises made after four protesters were killed on April 4. Despite a promise for an expert delegation to visit the site of the proposed plant, which has not been subject to environmental assessment and would force the relocation of up to thousands of villagers, the government has instead proposed sending 20 villagers to visit coal plants in China. However, the government is refusing to move or cancel the plant. (Dhaka Tribune,Daily Star)

Romanian utility slashes coal: Complexul Energetic Hunedoara (CEH), a Romanian government-owned utility, has announced plans to close two of its four coal mines and close 825 MW of coal plant capacity in a bid to cut losses. In January CEH was declared insolvent with debts of US$379 million, most of which is owed to the government’s tax agency. (Romania Insider.com)

Turkish Government pursues domestic coal expansion: Turkey’s Energy Minister, Berat Albayrak, has flagged the introduction of a bill to make it “much easier” for investors to proceed with new coal plants. Turkey has proposed 67,000 megawatts (MW) of new coal plants, with many of these to be based on imported coal. At the opening of a new coal plant, President Recep Tayyip Erdogan advocated increased use of local coal to cut the country’s current account deficit. (Hurriyet Daily News,Hurriyet Daily News)

Protests against proposed sale of Vattenfall: The proposed sale by the Swedish government-owned Vattenfall of its mines and power stations in Germany has prompted protests outside embassies in 13 countries. Greenpeace is urging Vattenfall’s supervisory board to reject the proposed sale to the Czech-owned EPH as it would prolong mining for decades more. (Prague Daily Monitor)

companies + markets

India slashes power demand forecast: In the latest revision of its 2013 power plan, the Ministry of Power has cut its projection of electricity demand in 2022 from 289,000 MW to 239,000 MW, according to anonymous officials. (The news report infers – but does not explicitly state – the reduction relates to thermal power plant capacity.) The revision reflects lower demand growth, the poor financial state of the distribution utilities, reduced utilisation rates and increasing renewable capacity. (Business Standard)

Australian government triples brown coal royalties: The Victorian Government has – from January 1 next year – tripled the royalty levied on the almost 60 million tonnes of brown coal used in the state’s power stations. The increase, which will raise about US$194 million over four years, is the first increase in a decade and brings the state’s royalties into line with those of NSW and Queensland power generators. The royalty increase is on top of the US$164 million increase in rehabilitation bonds following the inquiry into the 45-day long Hazelwood mine fire. (The Age)

Eskom investigates old coal upgrades:South Africa’s publicly-owned utility Eskom has announced it will undertake pre-feasibility studies over the next 18 months into upgrading four of its oldest coal power stations. The four plants – Komati, Camden, Hendrina and Arnot – were built in the 1960’s and 1970’s and have a combined capacity of 6470 MW. While Eskom is focussed on rebuilding its old plants, the developer of the Bokpoort solar plant believes the utility should instead investigate the option of concentrated solar power. (Eskom,Tech Central)

India restates plan to end coal imports:When asked when he wanted an end to coal imports India’s Power Minister, Piyush Goyal, said, “I wish it was yesterday. Maybe two or three years.” He also flagged he was considering how to deal with plants which had been designed to use imported coal. These, Goyal said, may only end up using imports “until the time I can either retrofit or replace those plants.” (Bloomberg)

Dutch bank criticised for Russian coal deal: The major Dutch banks ING and Rabobank have been criticised by the bank watchdog group Eerlijke Bankwijzer for loaning US$246 million in February to the largest Russian coal company SUEK. The two banks were part of a consortium which loaned SUEK US$1 billion for refinancing existing loans and general use. Ahead of the Paris climate conference ING pledged to stop investing in coal while Rabobank boasts it finances sustainable energy. (Dutch News.nl,Fair Finance Guide Netherlands)

Poland launches restructured coal company: Despite the Polish Government successfully pressuring six state-owned companies to invest US$388 million in the near-bankrupt coal company Kompania Weglowa (KW), doubts remain the new company will be viable without an increase in coal prices. Under the deal eleven of KW’s mines will be transferred to Polska Grupa Gornicza (PGG), with the unions agreeing to pay cuts and unprofitable mines being transferred to the state mining restructuring company, SRK, for likely sale or closure. (Bloomberg,Platts)